Why did thematic funds perform poorly in 2025?

Many thematic funds underperformed due to market volatility and 'Trump tantrums', leading to negative returns in sectors like IT, Pharma, and Infrastructure.

Which thematic funds offered the best returns in 2025?

Auto and transport, banking, and energy thematic funds delivered the highest returns, ranging from 11% to 18%, though these were lower than 2024.

What investment strategy do experts recommend after the 2025 thematic fund performance?

Experts suggest investors focus on long-term themes rather than cyclical industries, highlighting sectors like Banking & Finance, Auto, and FMCG for future growth.

Home / Business and Economy / Thematic Funds Disappoint: Only 3 Themes Beat Expectations in 2025

Thematic Funds Disappoint: Only 3 Themes Beat Expectations in 2025

10 Jan

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Summary

Many thematic funds underperformed, with IT, Pharma, and Infra funds showing negative returns.
Auto, banking, and energy themes delivered returns but lower than the previous year.
Experts advise focusing on long-term themes over cyclical industries for better returns.

Thematic Funds Disappoint: Only 3 Themes Beat Expectations in 2025

Thematic funds have largely failed to meet investor expectations in 2025, with only a handful delivering the desired double-digit returns. Information Technology, Pharmaceutical, and Infrastructure funds, which were once popular choices for accumulating capital, saw significant downturns. IT funds, for instance, posted an average negative return of 4% last year, a sharp decline from the 27% gains recorded in 2024.